Jones v. Sea Tow Services Freeport NY

Charles and Clara Jones (plaintiffs) owned a boat that capsized and became shipwrecked on Atlantic Beach in New York. The Coast Guard contacted Sea Tow Services Freeport NY, Inc. (Sea Tow) (defendant) to help with the boat. Captain Raia and Michael Marsh from Sea Tow arrived to assist with moving the boat off the shore. The Joneses were asked by Sea Tow to sign a Lloyd’s Standard Form of Salvage Agreement, referred to as Lloyd’s Open Form (LOF). The LOF stated that disputes would be resolved by arbitration in London under English law. Despite communicating to Sea Tow that she was unable to comprehend the terms of the LOF, Clara signed for Charles. The boat was towed and salvaged by Sea Tow, who sought compensation of over $15,000. Sea Tow secured a lien through the Joneses’ insurance carrier to be enforced wherever the boat was located. Sea Tow initiated arbitration proceedings in London for the money owed. The Joneses filed a declaratory action in United States district court, seeking a declaration of the parties’ responsibilities under the LOF. Sea Tow filed a counterclaim for the amount owed. The district court denied the Joneses’ motion for summary judgment on the substantive contractual-fraud claims asserted in the declaratory action and stayed the action pending the outcome of the London arbitration. The court held that the LOF was governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (convention), 9 U.S.C. §§ 201–208, because the language of the LOF created a reasonable relation to a foreign nation, England. The Joneses appealed.